Dear readers, the latest 6-month T-bill (BS24125S) closed its auction yesterday.
The cut-off yield of the T-bill is 3.02% per annum and with that, I believe some investors are cheering as the yield is slightly above that of the previous 6-month T-bill by 0.02% per annum.
When the US Federal Reserves signals its intention to cut interest rates, many flock to equities in search of higher yields. There are some comments that cast aspersion on 3% per annum from savings bonds, fixed deposits, T-bills is “too low”.
Now with the subsequent cutting of the interest rates from US’ Federal Reserves less likely to be a definite affair, I think there is still some appreciation and interest for less risk money instruments like bonds, T-bills and fixed deposits for that 3% per annum or thereabout.
I will suggest all of us focus more on the 3% per annum from the lesser risk investment tools. No, I am not encouraging all of you to go and buy into equities and take on risks. What I mean is that though interest rates are slightly coming down, there does not seem to be any moderation in the higher cost (as compared to years back) of living these days.
When interest rates are going down, I don’t see my favorite toast set meal at $6.30 coming down in price.
What is fair enough to say is that mortgage holders will see some reprieve from reduced mortgage loan instalments if they switch to lower-rate packages.
But for the everyday items, I will still encourage all to save where possible.
Eat less and eat less unhealthy food where possible and we get a fitter body as a result.